The Committee of Creditors (CoC) of Reliance Capital is planning to seek a 90-day extension to the June 3 deadline to complete the resolution process of the debt-laden firm. If approved, the CoC will get time till September 3 to close the insolvency process.
The CoC, led by State Bank of India (SBI), which met on Monday has unanimously agreed to seek an extension and has informed the administrator of their decision. However, a final decision would be taken by the CoC at its next meeting, source close to the development said.
“There are a number of things to be put in place, including checking the books, conducting due diligence, inviting financial bids and shortlisting the candidates. The remaining nearly two months’ time is not enough to complete the entire insolvency process, and hence the CoC has unanimously decided to seek an extension,” a source said.
As per the Insolvency and Bankruptcy Code (IBC), the administrator has to close the resolution process of a firm within 180 days, which is June 3 for Reliance Capital. The company had a consolidated debt of about 40,000 crore and about 23,000 crore of verified claims.
Reliance Capital had earlier said in a regulatory update that it had received as many 55 expressions of interest (EoI) for its insolvency proceeding. The applicants included a consortium led by Piramal Group, Yes Bank, Zurich Insurance Company, IndusInd International Holdings, Jindal Power and Darwin Platform Group of Companies chairman Ajay Harinath Singh.
The Piramal Consortium, with PEL Finhold as the lead partner and India Resurgence Fund, has bid for both the options; Reliance Capital as a whole and its business clusters. Piramal Group had previously also bid for and also taken over Dewan Housing Finance Corporation.
The bidders had two options – either to bid for the entire assets of Reliance Capital or one or more of its clusters (subsidiaries). The subsidiaries are Reliance General Insurance, Reliance Nippon Life Insurance, Reliance Asset Reconstruction Company, Reliance Securities, Reliance Commercial Finance and Reliance Home Finance.
On November 29, 2021, the Reserve Bank of India superseded Reliance Capital’s board following payment defaults and governance issues, and appointed Nageswara Rao Y as the administrator for the bankruptcy process. The regulator also filed an application for initiation of Corporate Insolvency Resolution Process (CIRP) against the company before the National Company Law Tribunal’s (NCLT) Mumbai bench. In February this year, RBI appointed administrator invited EoIs for sale of Reliance Capital assets and subsidiaries.
